Hayward: Large housing project planned for old Mervyn's headquarters

HAYWARD -- A request to tear down the old Mervyn's headquarters to build 445 townhouses and apartments -- the largest downtown housing project in years -- have been submitted to the city.ï»¿

The 11.3-acre campus has sat vacant on the northern edge of downtown along Foothill Boulevard since 2008, when the retail chain went out of business.

The proposal from Integral Communities calls for razing the four-story 336,000-square-foot structure -- built in 1957 as an Emporium-Capwell department store -- and constructing 124 three-story for-sale townhouses and 321 upscale apartments in a five-story structure.

The project would include 30,000 square feet of ground-level retail space at the corner of Foothill and City Center Drive, said Mark Butler, vice president of acquisitions for Integral, which has offices in Danville and Southern California. It also has an office on B Street.

"This plan gives a combination of retail and high-quality residential that will generate additional retail sales in downtown and create a more dynamic downtown area," Butler said.

The area is zoned for retail on the ground floor, with housing or offices allowed above that. Integral is requesting a conditional use permit to allow residences on the first floor.

The current parking garage would remain, with 890 covered parking spaces.

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That's not enough, a nearby resident said. "Parking is bad already," said Mike Urioste, vice president of the Prospect Hill Neighborhood Association.

Integral Communities representatives met twice with the Prospect Hill group, which has gone on record opposing the project. The residents want the ground floor to be 100 percent retail and all the units to be owner-occupied, according to the staff report.

"We're not opposed to developing the property, but we'd like it to be in a way that's of benefit to the neighborhood and of benefit to the city. Businesses bring in more taxes and jobs," Urioste said. "We need new businesses, not more high-density housing."

Integral has named the project @The Boulevard. "It seemed appropriate since it's on Foothill," Butler said.

The project is scaled back from the company's early proposal, which called for 570 residences and 1,000 square feet of retail space. "We've listened to the community and city and made a number of design changes," Butler said.

"I invited downtown business people to briefings on the project, and there was 100 percent approval," said Kim Huggett, chamber president and CEO. "Whether it's bankers, restaurants, retail shops or the movie theater, the overwhelming response has been this is a way to rejuvenate the area with a population that is inclined to shop downtown."

The apartments would attract residents with annual incomes of $65,160 to $103,685, according to the staff report. The townhouses would be listed in the mid-$400,000 to mid-$500,000 range.

Rudy Grasseschi, owner of The Cobblers in the block of Foothill just south of the Mervyn's site, said he thinks the development will be good for the economy of the area. "From what I understand, this will attract upscale residents. I saw the plans, and I like it," he said.

Nearby Kraski's Nutrition owner Elie Goldstein was more cautious. "I think Hayward needs to first think about building a foundation of good schools and police providing safety," he said. "I'm not against it, if they can show they can provide services for families and safety."

Butler would not estimate when work would begin on the development or how long construction would take . The plan must go through the Planning Commission.

"We believe in downtown Hayward," Butler said. "We think this is a great opportunity to provide a combination of retail and high-quality mixed-use development and put more feet on the street to support downtown Hayward."